The reservoir is BP’s third in the Paleogene system, where the company made its Kaskida and Tiber discoveries in 2006 and 2009. The Keathley Canyon, the site of the Gila discovery, was acquired in 2003. BP is the 80 percent owner and ConocoPhillips owns the remaining 20 percent share.

It is the fourth Paleogene find for ConocoPhillips, which also owns an 18 percent working interest in the Tiber, as well as a minority share in the Coronado and Shenandoah in the Gulf of Mexico’s Walker Ridge.

The companies plan to begin appraisal drilling to determine the size and commercial prospects for the discovery, but have already indicated that the find is ‘significant’.

Larry Archibald, senior vice president of exploration for ConocoPhillips, said the find shows the potential of the company’s conventional exploration program. “We have built a significant Gulf of Mexico deepwater acreage position and achieved success with discoveries at Tiber, Shenandoah, Coronado and Gila, validating our exploration strategy in the prolific Lower Tertiary trend,” he said.

BP says that regardless of the new discovery’s economics, it is another feather in the British company’s cap in the Gulf of Mexico, where it still battles the specter of the Macondo well explosion in 2010.

“The Gila discovery is a further sign that momentum is returning to BP’s drilling operations and well execution in the Gulf of Mexico,” said Richard Morrison, Regional President of BP’s Gulf of Mexico business.

BP also confirmed Wednesday the discovery of oil at the Pitu site in offshore Brazil, in a project where it plans to invest jointly with Petrobras, which is currently the operator. The discovery is about 30 miles off the coast of Rio Grande and is at a depth of more than 5,000 feet, Petrobras said in a written statement.

But the Brazil discovery will trigger write-offs of more than $1 billion for the British oil giant, the company said in a written statement. It will be required to write off $230 million for the higher costs of drilling the well relative to its value, as well as an additional $850 million, which is based on the amount allocated to the Pitanga well when BP acquired it in a 2010 deal with Devon.

A new module is lifted on to BP's Andrew platform, located approximately 230 kilometres North East of Aberdeen, Scotland.

A new module is lifted on to BP's Andrew platform, located approximately 230 kilometres North East of Aberdeen, Scotland.

Photo: BP

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The 700 tonne module is lifted into position on BP's Andrew platform in the North Sea. The module handles production tied-in from the nearby Kinnoull field and is one of three reservoirs being developed as part of the rejuvenation of the Andrew area. less

The 700 tonne module is lifted into position on BP's Andrew platform in the North Sea. The module handles production tied-in from the nearby Kinnoull field and is one of three reservoirs being developed as ... more

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The Deepsea Stavanger Drilling Rig operates with a support vessel in Angola, Africa.

The Deepsea Stavanger Drilling Rig operates with a support vessel in Angola, Africa.

Photo: BP

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BP's Valhall platform operates in the Norwegian North Sea.

BP's Valhall platform operates in the Norwegian North Sea.

Photo: BP

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The first ignition of a flare occurs at BP's Skarv Floating, Production, Storage and Offloading vessel on December 5, 2012 using buy back gas.

The first ignition of a flare occurs at BP's Skarv Floating, Production, Storage and Offloading vessel on December 5, 2012 using buy back gas.